The first deposition was of a former employee of Watterson Prime, a contractor that re-underwrote mortgages in EMC securitizations. The employee has claimed that Watterson simply rubber-stamped the loans; even mortgages that the contractor rejected, she has said, were nevertheless placed in MBS loan pools. Assured and the other monolines argue, of course, that they were deceived about the supposedly independent review of the underlying mortgage loan pools in the securities they agreed to insure. Whistleblower deposition testimony could be powerful evidence to support their arguments.

We only know about the whistleblower depositions because of a letter JPMorgan’s lawyers at Greenberg Traurig sent to Manhattan State Supreme Court Justice Charles Ramos, who is overseeing the Ambac case in state court, and to U.S. District Judge Paul Crotty, who’s presiding over Syncora’s Manhattan federal court case against EMC. (JPMorgan isn’t a defendant in that action.) The Jan. 18 letter identified the Watterson confidential witness by name, accused Patterson Belknap of “ambush litigation tactics,” and asked the judges to order Patterson to turn over a signed affidavit from her in advance of the Jan. 20 deposition. Greenberg also asked for affidavits from three other whistleblowers whose depositions have been scheduled. Despite a Jan. 19 Patterson letter claiming privilege for the whistleblower affidavits it has obtained, the monolines were ordered to turn over the witness statements.

A blogger named Teri Buhl got wind of the scuffle over the whistleblower affidavits and published a post accusing JPMorgan and Greenberg Traurig of attempting to intimidate the monolines’ whistleblower witnesses. The bank’s lawyers promptly responded with a letter to Crotty, complaining that Patterson Belknap was leaking non-public information. “We do object to plaintiff’s counsel’s repeated use of reporters such as this one to generate articles like this,” the letter said. “We would appreciate the court directing plaintiff’s counsel to refrain from this activity in the future.”

Patterson countered Greenberg’s assertion in a fiery Jan. 23 letter to Crotty. (All of the correspondence in the flap is here.) “[EMC's] letter falsely asserts that our firm disclosed non-public information to the press,” the Patterson response said. “That simply is not true.” Patterson pointed out that all of the factual information in Buhl’s post came from public-record documents — in a flap EMC itself precipitated when it disclosed the Watterson witness’s name in its demand for her affidavit.

Patterson also took the opportunity to needle EMC about the whistleblowers’ depositions: “EMC seeks to divert attention from the fact that the testimony the whistleblower gave on Friday (as well as testimony offered by a Georgia law enforcement officer on Saturday) confirmed the statements in the affidavits that EMC knowingly misrepresented in its due diligence process, which was fundamentally and deliberately deficient,” the Jan. 23 letter said.

Crotty — who still hasn’t issued the loss-causation summary judgment ruling that was expected by the end of last month — denied Greenberg’s request for a gag order on Tuesday, writing that “as to talking to the press about public judicial events, the parties should be guided by the code of conduct and related opinion on ethics, concerning good behavior of attorneys.”

I’ve reported that MBS suits against JPMorgan are suddenly in vogue. That trend continued this week with the 256-page complaint John Hancock’s lawyers at Grant & Eisenhofer filed in Manhattan State Supreme Court. The public record is already full of grist for the plaintiffs’ lawyers filing these suits, but deposition testimony from underwriting whistleblowers is going to be quite a significant addition to the record. Once again, the monolines are trailblazing for MBS investors.

I left a phone message for JPMorgan counsel Richard Edlin of Greenberg and sent an email request for comment to a bank spokesperson. Neither got back to me.

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Alison Frankel updates On the Case multiple times throughout the day on WestlawNext Practitioner Insights. A founding editor of the Litigation Daily, she has covered big-ticket litigation for more than 20 years. Frankel’s work has appeared in The New York Times, Newsday, The American Lawyer and several other national publications. She is also the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.